Dana Point wants rules for short-term rentals

Plans to regulate short-term vacation home rentals in the city after years of discussion moved forward Tuesday night following a City Council vote to draft an ordinance establishing rules and regulations.

While the council had few suggestions for staff as far as the details of the regulations, the council did direct city staff to draft a model ordinance for them to look at during a later meeting. Mayor Lara Anderson and Councilman William Brough opposed the resolution to draft an ordinance.

In September, the council voted 4-1, with Anderson dissenting, to pursue regulations. The council recognized an issue existed with the rentals but shared concern overtaking property rights from those who use their homes as rentals.

A recent city-commissioned phone survey of 400 registered Dana Point voters by consulting firm True North Research said 56 percent of respondents believed that owners should be allowed to rent out their properties for short-term vacation use, defined as less than 30 days. Thirty-two percent opposed it and 12 percent were undecided.

Staff presented the council with ordinances from three other cities including Newport Beach, Mammoth Lakes and Big Bear Lake. Councilwoman Lisa Bartlett said despite the info on the three other cities she still wanted to see more, especially data from coastal cities.

"The short-term rents are different type of lodging. Some people prefer more of the home environment as opposed to the hotel room and I can understand that," Bartlett said, "On the other hand we don't want to be disruptive to our residential communities so we have to have some type of a balance...I'd like to see an extensive matrix with a number of coastal cities that have short-term rental programs in place."

The council labeled Mammoth Lakes and Big Bear Lake as resort towns but they said Dana Point was more of a residential city. While Dana Point has four large resorts, the number of short-term rental homes in the city is estimated at 268 while Mammoth Lakes has 2,800 short-term rental homes, Big Bear Lake has 1,200 and Newport Beach has 700, according to a city staff report.

While short-term rentals are currently banned in the city, there is little to no enforcement of the ban, which is what led to years of discussions on the subject dating back to 2007 when the City Council held an informational meeting to discuss short-term rentals, according to the report.

While the council majority has been leaning toward regulations, the one opponent to the short-term rentals has been Mayor Lara Anderson whose term expires on Dec. 4

"Within our little city...we have 2,000 hotel rooms," Anderson said. "I don't see a huge need for more lodging in this city."

While Anderson has been opposed to regulating the rentals and instead being in favor of increased enforcement of the current ban, she has been pushing the council to take action either way.

"Are we just going to continue to kick the can down the road on this and kinda turn a blind eye? Because I don't think that is the right thing to do," Anderson said. "We either need to get some rules or enforce the rules."

The areas with the highest concentration of rental homes are Lantern Village and Capistrano Beach, according to Anderson. These areas are more densely populated but there are still a lot of families that live in those areas and there are more parking issues, Anderson said.

"Why push the problems into those two areas," she said.

The council agreed that they would not trump homeowner's association rules on short-term rentals.

One resident said he was so fed up with the noise from renters he offered to trade houses with Councilman Steven Weinberg—Weinberg declined the offer.

"Our area does not deserve it, we've paid taxes to this city and county for a long time and we deserve the right to have a nice community and a block without these motels," said Capistrano Beach resident Gary Clark.

Weinberg said the problem is not vacation rentals but rather bad behavior on the part of renters and owners.

"What they're talking about is bad behavior of tenants. Vacation rentals aren't a bad thing," he said. "If we make sure we weed out owners who have tenants who have bad behavior I think we can make it work."

Weinberg also said prohibiting the rentals also does not solve the problem alluding to the alcohol prohibition failure of the 1920s.

"Every time you prohibit something it doesn't work. We have to figure out how to regulate it," he said.

A new set of regulations for vacation rentals could mean additional revenue for the city.

The report says the cost for Dana Point to implement such a program, or combination of them, would be offset by a permit fee and transient-occupancy tax. The tax would be the same as for hotel visitors – currently 10 percent of the rate for hotel and motel rooms. The report estimates annual revenue from the program at $400,000.

But while the city may increase revenue from regulating rentals, Anderson said the 10 percent tax isn't enough to put up with "obnoxious tourists."

The report also says a decision to regulate rentals or step up enforcement of the ban would affect the city's code-enforcement division. The report recommends that the council hire a part-time code-enforcement employee to help implement any program. The new hire would cost almost $77,000 in the first year and more than $54,000 each year after that, the report says.